Groupon Inc (NASDAQ:GRPN) takes Amazon head-on with full-price stores

Posted by Nathan Alexander August 28, 2013 0 Comment 850 views

Groupon Inc (NASDAQ:GRPN) is a company that gained fame by selling daily deals at huge discounts. The company is now planning on buying warehouses to store a range of full-price goods. This strategy is a deviation from the pattern that it has followed so far and pits it directly against Amazon that is known for its efficient and humungous inventory management.

Flash sales profits dip

The company’s transition from daily deals and flash sales to the full-price goods segment has also prompted various other companies to shift from the ecommerce to physical store businesses and they are moving away from selling overstock goods. Last year Fab started building its supply of full-price goods. Jason Goldberg, the company’s Chief Executive Officer announced that the company was now launching physical retail-stores. In April he said that less than 40 percent of the company’s total revenue had come from flash-sales.

Other players

Some big names in this space have had a very difficult time switching to full-price mode. Gilt Groupe had to stall its entry into this field, but it had never really made any move to create its own retail-stores. GRPN’s full-price offerings are one ray of sunshine in its operations. Year-over-year, its revenue from this particular business has grown by more than 50%.

Eric Lefkofsky took over as the CEO of the company very recently. He said that this effort will be on par with what Sam’s Club and Costco has and only as select goods will be available at higher discounts.

Latest trading session

In Tuesday’s trading session GRPN stock dipped by 3.79%. The opening price of the shares was $10.8 which touched an intraday high of $10.20 and closed at $9.89. More than 16.28 million shares were traded on Tuesday while the average volume of shares traded over 30 days was 16.54 million. GRPN has a market-cap of $6.61 billion.

About Nathan Alexander

Nathan Alexander holds bachelor’s degrees in Journalism and European Studies from Boston University. Nathan reports round up the day’s business and financial market news and include keynote interviews with major business players and updates on Asian, European and US stock markets. He has interviewed heads of leading European banking institutions such as European Central Bank President Jean-Claude Trichet and HSBC Chairman Stephen Green, and CEOs from the business world including Microsoft founder Bill Gates, Virgin Chairman Sir Richard Branson and former Porsche President and CEO Dr Wendelin Wiedeking.

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